The China Blog: Online Gaming, Telecom, Digital Home...

Wednesday, January 17, 2007

China to Get Xbox 360 Soon

Chinese gamers will soon be able to get their hands on a shiny Xbox 360, a legitimate one. A Reuters article revealed that Xbox 360 may launch in China in the coming months. Microsoft has had its eyes on Chinese gamers' growing wallet for quite a few years and the launch of PS2 and PSP in China have provided precedents (when I brought my PSP back to China last year, several of my friends said they were planning to buy one). Piracy will continue to be a concern and such a launch does need blessing from the Chinese government. Nevertheless, the great growth and potential of the Chinese gaming market is obvious. The growth of MMOG gaming and microtransaction-based gaming has been tremendous. There are now quite a few Chinese gaming companies on NASDAQ. According to a new government report, in 2006 more than 30 million Chinese play online games, generating $800 million, a 70%+ growth compared to 2005.

Maybe Microsoft can treak its model a little bit; rather than relying on retail boxes, it can focus more on Xbox Live! gaming services and digital downloads in China. Of course, Microsoft can also sell digital music and videos through the platform, bringing more revenue. Nevertheless, I doubt its IPTV announcement will apply to China anytime soon since the government has a tight grip on IPTV deployments, but I won't rule out the possibility of Microsoft leveraging Xbox 360 as its stepping stone into Chinese people's digital living room.

The rumor about Xbox 360 entering China has been floating around in Chinese media for a while now. I also heard a rumor that the9.com, the publisher/distributor of World of Warcraft in China, is vying to become the sole agent for Xbox 360 in China. The9.com has been looking to diversify its revenue sources (90%+ comes from WoW). Will Xbox 360 be the answer?